Demo: batchOverflow on Decentralized Exchange
On April 22nd a well known Ethereum smart contract exploit was discovered. The exploit, termed batchOverflow allowed hackers to generate an infinite amount of ERC20 tokens and send them to their wallets. These tokens were later dumped on major exchanges on unsuspecting traders and investors to be laundered for other ERC20 tokens and later changed into fiat currency.
The unusual transfer amounts for several tokens were noticed and investigation began, however at the time there was no security response mechanism to take proper action in case of a smart contract breach or token laundering.
By the time Smart contract owners and Exchanges were reached, hackers successfully sold and laundered stolen coins causing millions of dollars in damage.
For the purpose of our demo, we created a Decentralized Exchange alongside with several vulnerable ERC20 tokens on the Rinkeby test network. Our test Exchange is connected to Monitorchain and is using it as a smart contract oracle. We will be using our vulnerable ERC20 test tokens to simulate the batchOverflow exploit and demonstrate what happens when it gets detected.
MonitorChain is currently live on the Main Net and provides live monitoring of token contract health for up to the block detection of potential exploits, hacking or theft patterns. Once a breach is detected it will automatically send out emails and notifications directly via ethereum network to be used as a smart contract oracle.
Exchanges and Token smart contracts that use MonitorChain are automatically protected and the hacker is prevented from dropping his stolen tokens onto the exchange.
In the video below we will be demonstrating on the Rinkeby test network how MonitorChain can be used by token smart contracts and exchanges to detect security exploits.